The Financial Times Guide to Strategy: How to Create and Deliver a Winning Strategy, Third Edition

Part 5. Strategic shifts in the twenty-first century: The impact of increasing returns, networks and the net

 

During the past quarter century, there has been a cumulative process of important change in the economy and corresponding changes in the nature of competitive advantage. The dynamics of competition have become much richer. Although the rules of strategy have not been overturned, they certainly need to be supplemented.¹

Four shifts in the economy

The significant changes in the economy itself are:

• the increasing importance of networks

• the Internet and the separation of information flows from physical flows

• the deconstruction of the economy and its value chains into a greater number of separable layers, some of which are ‘sweet spots’ of much ...